The amount a client needs to put into a down payment when purchasing a home is one of the most misunderstood parts of the home buying process. Many still believe that in order to qualify for a mortgage you must put 20% down; this is simply inaccurate. There are now numerous products and programs that allow for lower down payment options for those that qualify.
Some examples include:
· First-time home buyer programs with lower down payment options
· 100% financing options for VA and USDA products
· Conventional programs that offer 3%, 5%, 10% and 15% down payment options
· FHA programs with a 3.5% down payment option
There are also options when thinking about how to obtain the funds for your down payment. Sources for a down payment include:
· The borrower’s savings
· A down payment gift
· A second mortgage or grant, often referred to as down payment assistance
· A loan against an asset that the borrower owns
There are strict guidelines surrounding the products and programs as well as where down payments can come from. Please contact me to assist your clients in understanding all of their down payment options.